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Masterof Arts (Economics) MECP-001 MASTEROF ARTS (ECONOMICS) Determinants of urban poverty the Case of Sebeta Hawas, Oromia National Regional Stat School of Social Sciences Indira Gandhi National Open University Maidan Garhi, New Delhi-110 0 Course Code: MEC Program Code: MECP-001 Enrolment No 1 0 9 1 0 1 0 2 3 Study center Code: 8 0 1 5 Regional Center: Addis Ababa TOPIC OF THE PROJECT DETERMINANTS OF URBAN POVERTY IN THE CASE OF SEBETA HAWAS, OROMIA NATIONAL REGIONAL STATE Project work submitted to the Indira Gandhi National Open University in partial fulfillment of the requirement for the award of the Degree – Master of Arts (Economics) . I hereby declare that this work has been done by me and has not been submitted elsewhere. Signature of the candidate …………………. Name of the candidate: MesfinMahtemeselase Alula Address if any: Addis Ababa, Ethiopia Year: 2014 Certificate Certified that the project work entitled (TOPIC OF THE PROJECT):DETERMINANTS OF URBAN POVERTY IN THE CASE OF SEBETA HAWAS, OROMIA NATIONAL REGIONAL STATE submitted by MesfinMahtemeselase Alula is his/her own work and has been done /redone in the light of evaluator’s comments under my supervision . It is recommended that this project be placed before examiner for evaluation. (Signature of the supervisor) Name: DugasaMulugeta Designation: PHD, Assistant Profesor Address: Addis Ababa, Ethiopia Study center________________________________ Regional Center________________________________ Date_________________________________________ ii Acknowledgement I owe a big debt of gratitude to my MA thesis advisor Dr. Dugasa Mulgeta. In spite of my busiest times during the study he had been consistently following up my progresses, flourishing meticulous supervisions and constructive comments. Taking all my burdens into account he scheduled our contact times, most often, in favor of me, he is indeed a friendly professional who provided me with fabulous ideas which truly were prolific for the successful accomplishment of my academic endeavor. City Service Manager of Sebeta Hawas, and other staff members are duly acknowledged in providing me with the necessary supports. The staffs of Sebeta Haws Woreda finance and Economic development office for their enthusiasm and perseverance in helping me from the start to the completion of the survey. My sister w/ro Aster Mahtemeselase and closer friends- Ato Tibebu Hailu I am really satisfied with your closer encouragements, follow ups and helps in my study. Once more, I am happy that my lovely daughters Saron Mesfin has seen the fruit of my success My lovely colleagues Ato Shentema Weldesenbet, Ato Dejene Asmare, W/rtAlmaz Tufa and W/rt. Meseret Chala I am delighted with the commitment we had been doing during my five years study. I should say let we please sustain our dedication and rejoice. iii Acronyms CBO=Community Based Organizations USD=United States Dollar MoFED=Ministry of Finance and Economic Development OBoFED= Oromia Bureau of Finance and Economic Development UNDP=United Nations Development Program PPP=Purchasing Power Parity GNP=Gross Domestic Product HDI=Human Development Index NGO=Non-Governmental Organization DAG=Development Assistance Group DFID=Department for International Development GTZ=German Technical Cooperation CBN=Cost of Basic Needs FEI=Food Energy Intake Cal=Calorie EEA=Ethiopian Economic Association EEPRI=Ethiopian Economic Policy Research Institute CSA=Central Statistics Authority ETB=Ethiopian Birr HICE=Household Income and Consumption Expenditure TGA=Transitional Government of Ethiopia DAG=Development Assistance Group SPSS=Statistical Package for Social Scientists HH= Household WB=World Ban iv Table of Contents Chapter One ............................................................................................................................ - 1 - 1. Introduction ....................................................................................................................... - 11 - 1.1. Background ................................................................................................................. - 11 - 1.2. The Study Area- Sebeta Hawas .................................................................................... - 12 - 1.3. Research Problem........................................................................................................ - 12 - 1.4. Research Questions. .................................................................................................... - 17 - 1.5. Research Objective ...................................................................................................... - 17 - 1.5.1 General Objective .................................................................................................. - 17 - 1.5.2Specific Objectives ................................................................................................. - 17 - 1.6. Research Relevance ..................................................................................................... - 18 - 1.7. Research Scope ........................................................................................................... - 18 - 1.8. Research Limitation .................................................................................................... - 18 - 1.9. Research Methodology ................................................................................................ - 19 - 1.9.1. Data Type and Source ........................................................................................... - 19 - 1.9.2. Sample Size .......................................................................................................... - 20 - 1.9.3. Sampling Technique .............................................................................................. - 20 - 1.9.4. Data Collection Instrument ................................................................................... - 22 - 1.9.5. Method of Data Analysis ....................................................................................... - 22 - 1.9.6. Model Specification (Econometric Issue) .............................................................. - 22 - v 1.9.7. Model Variables and Hypothesis ........................................................................... - 23 - 1.9.8. Organization of the Paper ......................................................................................... - 26 - Chapter Two: Review of related Literature ............................................................................ - 28 - 2.1. Definitions of Poverty ................................................................................................. - 28 - 2.2 The Basic Needs School ............................................................................................... - 29 - 2.3 The Capability School .................................................................................................. - 29 - 2.3 Poverty Line Definitions .............................................................................................. - 30 - 2.3.1Objective Poverty Line ........................................................................................... - 30 - 2.3.2Relative Poverty line ............................................................................................... - 31 - 2.3.3 Subjective Poverty-Line ......................................................................................... - 32 - 2.3 Poverty Lines ............................................................................................................... - 33 - 2.4 Setting Poverty Lines ................................................................................................... - 34 - 2.4.1 Food Energy Intake Approach (FEI)....................................................................... - 35 - 2.4. Measures of Poverty .................................................................................................... - 36 - 2.5. Poverty Indices ............................................................................................................ - 36 - 2.5.1 Head Count Index (P0) .......................................................................................... - 36 - 2.5.2Poverty Gap/Depth Index (P1) ................................................................................ - 37 - 2.5.3 Severity Index (P2) ................................................................................................ - 37 - 2.6 Poverty in the Urban Setup ........................................................................................... - 38 - 2.7. Review of Related Literature: Empirical Evidence ...................................................... - 39 - vi Chapter Three ........................................................................................................................ - 54 - Results and Discussion .......................................................................................................... - 54 - 3.1. Identifying the Poor ..................................................................................................... - 54 - 3.2. Descriptive Analysis .................................................................................................... - 57 - 3.2.1. Household Characteristics and Poverty ................................................................. - 59 - 3.2.2. Education and Poverty .......................................................................................... - 63 - 3.2.3. Employment and Poverty .....................................................................................
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